Wyoming, the fourth-largest producer of natural gas and home to the biggest open pit coal mine in the country, recently became the top state for renewable energy per capita.
A recent state ranking by the Union of Concerned Scientists, a group advocating for a move to renewable resources for electricity generation, also listed Wyoming as the top state for new renewable energy development.
Coming first in any renewable category may be surprising to many in the Cowboy State, and for good reason. The state’s coffers have historically been filled with money from coal, oil and natural gas.
But despite the apparent burst of renewable generation, Wyoming is unlikely to turn into a California or Oregon, as the extent of wind growth in the state’s future is complicated by taxes and politics.
One hundred percent of Wyoming’s new capacity between 2016 and 2019 will be renewable due to wind projects coming closer to fruition, as stated in the report.
In reality, the state’s proposed wind farms, including the planned 3,000-megawatt Chokecherry and Sierra Madre wind farm near Rawlins, have been in the works for up to a decade. Between 2010 and 2016, while many other western states increased their renewable energy portfolios to align with new local legislation, Wyoming stayed out of the mix.
Though industry interest in Wyoming has flourished, the state, though its policies, has maintained a fierce loyalty to fossil fuel industries, which contribute billions of dollars in tax revenue to state and local coffers.
Wyoming’s stance draws criticism from some camps.
“Wyoming is at a bit of a crossroads, where if it doesn’t get on board soon it’s going to miss out on an incredible economic development opportunity for the state,” said John Hensley, deputy director of industry data and analysis for the American Wind Energy Association and a native of Glenrock. “It’s an opportunity that is going to go elsewhere in the country if [Wyoming] doesn’t move forward.”
The AWEA puts Wyoming first in terms of wind generation “potential,” which Hensley said could create a cascade of investment in the state with the potential for a wind workforce, manufacturing and development within the state’s borders.
But wind developers eyeing Wyoming may not see an open door. Wyoming’s wind resources, though strong, are not as prime as in some other areas of the West. Checkerboard patterns of private, state and federal land ownership can slow development, particularly of transmission lines to get wind power to market. And Wyoming is the only state that taxes wind generation: $1 per megawatt hour.
Mike Madden, R-Buffalo, would like that tax to be increased. He co-sponsored a bill to that end in the last legislative session, but it never made it out of committee.
“I think it’s incumbent on the state to be fair to all producers of electricity,” Madden said of his reasoning. “We can’t pick one and say, ‘We aren’t going to tax you.’ It just doesn’t seem like it’s fair.”
Madden is not opposed to wind development in Wyoming but is vehement in his objection to the federal handout that’s propelled wind forward in the market and helps the industry achieve its low cost for generation, he said.
The state’s one-of-a-kind generation tax simply offsets some of the benefit wind is receiving from the federal subsidy, and it doesn’t damage the companies’ bottom lines, Madden argued. Companies that say the state tax is problematic are being disingenuous, he added.
“You can’t have it both ways. You can’t say the [federal credit] is not important, but a generation tax is fatal,” Madden said.
Researchers at the University of Wyoming, however, cautioned at increasing the wind generation tax, suggesting it could deter future development in the state.
The source of contention on renewable development is the federal tax subsidy, which sunsets in four years. At that point the electricity market playing field should begin to level out. But Madden is doubtful that the sunset means an end to the wind subsidy.
“Those tax credits have been renewed before,” he said. “All it would take would be another administration that is sympathetic towards that industry. It’s just a snap of the fingers.”
Other lawmakers are even more skeptical of how Wyoming approaches renewable development. A handful of senators floated a bill last session that would have added a penalty to wind and solar generation in Wyoming, for Wyoming use. The bill, which also failed, was an inverse of the renewable portfolio standards in states like Colorado, Washington and California, where lawmakers have set goals to reduce fossil fuel generation in favor of renewables.
The bill’s sponsors argued that it would have given traditional sources of electricity generation, namely coal and natural gas, footing to combat the anti-fossil-fuel movement in other parts of the country. Its skeptics said Wyoming energy consumption was too small to make a dent on the supply and demand across the West.
“I think this perception that wind is undercutting the fossil fuel base is a misconception,” said Hensley, with the wind association. “If you look at wind on its own, while we continue to gain market share across the country, we are still about 5 percent. In Wyoming, most of the fossil fuel is going elsewhere. Coal is being exported to mid-Atlantic states. It’s those markets that are determining what is happening to the coal market share.”
Wind generation can quickly become controversial in Wyoming conversation, from its aesthetic impact on the landscape to its contribution to the state’s economy.
One of the chief complaints against it, echoed by Madden, is that unlike the traditional energy resources of Wyoming, wind offers far less in terms of jobs or revenue.
According to the UW study from 2016, Wyoming’s top five large wind projects, including the Chokecherry Sierra Madre project and the Viridis Eolia proposal north of Medicine Bow, would generate more than $700 million in tax revenue to local governments, more than $400 million to the state and more than $700 million to Wyoming schools, all over a 20-year period.
Coal revenue exceeds $1 billion every year.
However, wind proponents say there does not need to be a competition between wind and coal.
“We are not saying that wind needs to be 100 percent of the electricity mix,” said Hensley, of the wind association. “It pairs well with other source of electricity: coal, natural gas, solar and hydro. It’s part of an all-of-the-above energy strategy.”
Follow energy reporter Heather Richards on Twitter @hroxaner
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